AIG, Chubb Tell Delaware Justices to Back Jury in Fraud Dispute

A Delaware state court made a mistake when it tossed a jury’s finding that insurers were likely off the hook for a health-care program administrator’s $236 million settlement with the state of Texas over alleged Medicaid fraud, American International Group Inc. and Chubb Ltd. units told the state’s high court.

Jury verdicts should be set aside only for “extraordinary reasons,” Morris, Nichols, Arsht & Tunnell LLP senior partner Kenneth Nachbar argued on behalf of the insurers during during oral arguments Wednesday before the Delaware Supreme Court.

The case explores the unusual circumstances for disregarding a jury’s verdict, as well as ...